Key Takeaways
- The Australian Government 5% Deposit Scheme lets eligible buyers purchase with a 5% deposit and no LMI, with income and place caps gone since 1 October 2025; only location price caps remain.
- Most schemes stack, but the Australian Government Help to Buy Scheme and the Australian Government 5% Deposit Scheme cannot be combined.
- Qualifying for a scheme is not approval: serviceability, the APRA buffer, HELP debt, and genuine savings still decide what a lender will lend.
- New builds attract more grants, while an established home’s stamp duty concession is often the bigger upfront saving.
For first home buyers, 2026 is one of the more favourable years in recent memory to step into the market, and the reason sits almost entirely in the schemes available. In late 2025, the old Home Guarantee Scheme as it was known then was expanded significantly: income limits were removed, the annual cap on places was abolished, and property price caps were lifted. Combined with grants, stamp duty concessions, and tax-effective savings inside superannuation, the support on offer can shift your upfront costs by tens of thousands of dollars.
The catch is that the schemes are easy to misunderstand. Some apply only to new builds, some carry their own income and price limits, some can be stacked together, and some cannot, and qualifying for a scheme is not the same as being approved for a loan. Getting this wrong can mean missing a benefit you were entitled to, or worse, structuring a purchase around a scheme you cannot actually use.
This guide sets out every major grant and scheme available to first-home buyers in 2026, explains how they interact with each other and with the way lenders assess you, and gives you a framework for choosing the pathway that fits your situation. The aim is not just to list what exists, but to help you decide what to do with it.
The 2026 Landscape at a Glance
It helps to start with the shape of the support available, because the schemes do quite different things. Some give you cash, some let you buy with a smaller deposit, some reduce the tax, and one gives the government a share of your home. The table below summarises the main categories before we look at each in detail.
| Scheme | What it does | Main benefit | Key catch |
| First Home Owner Grant | One-off cash payment from your state or territory | Direct cash toward a purchase | Usually, new builds only |
| 5% Deposit | The government guarantees part of your deposit | Buy with 5% and no LMI or 2% for single parents | Property price caps apply. 2% applies to single parents or guardians with a dependent |
| Help to Buy | Government co-buys a share of your home | Smaller loan and repayments | Shared equity, income, and price limits |
| First Home Super Saver Scheme | Save a deposit inside super | Concessional tax treatment | Needs planning and a formal release |
| Stamp duty concession | Reduces or removes transfer duty | Large upfront savings | Price thresholds vary by state |
Federal Schemes Explained
The federal schemes form the backbone of first home buyer support, because they apply nationally and address the two biggest hurdles: the size of the deposit and the cost of Lenders Mortgage Insurance. Each works differently, and understanding the mechanics is what lets you use them well.
The Australian Government 5% Deposit Scheme
The Australian Government 5% Deposit Scheme, part of the broader Home Guarantee Scheme administered by Housing Australia (formerly the National Housing Finance and Investment Corporation, or NHFIC), lets eligible first home buyers purchase with a 5% deposit (or 2% for single parents) and no Lenders Mortgage Insurance (LMI). The government guarantees the portion of the deposit you fall short of the usual 20%, and that guarantee is what removes the lender’s need for LMI.
Eligible single parents and guardians with at least one dependent can use a separate stream that allows a deposit as low as 2%, again without LMI. This recognises that saving a full deposit on a single income is considerably harder, and for the right buyer it can bring a purchase forward by years. The same principle applies: the government guarantees the shortfall, and you apply through a participating lender.
From 1 October 2025 the scheme was expanded in three meaningful ways: the previous income limits of $125,000 for singles and $200,000 for couples were removed, the annual cap on places was abolished, and property price caps were lifted. In practice, all eligible first home buyers can now apply regardless of income, and there is no need to rush before places run out. Price caps still apply and vary by location, as set out below. Confirm the figure for your exact suburb at Housing Australia.
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| Location | Property price cap |
| Sydney and NSW regional centres | $1,500,000 |
| Brisbane and QLD regional centres (incl. Gold Coast, Sunshine Coast) | $1,000,000 |
| Melbourne and Geelong | $950,000 |
| Adelaide | $900,000 |
| Perth | $850,000 |
| Hobart, Canberra, Darwin, and other regional areas | Lower tiers apply; confirm with Housing Australia |
Two practical points are worth knowing. You cannot apply directly to Housing Australia; you apply through a participating lender as part of a home loan application. And the guarantee comes with an ongoing obligation to live in the property as an owner-occupier, so it is not a pathway for an investment purchase.
Help to Buy
Help to Buy is a federal shared equity scheme in which the government co-purchases a share of your home, up to 40% for a new home and 30% for an established one. Because the government owns part of the property, your loan is smaller and so are your repayments. You pay no rent on the government’s share, but when you sell, the government receives its proportional share of the proceeds, including any capital growth on its portion.
Help to Buy carries its own income and property price limits, so it suits a narrower group of buyers. Importantly, it cannot be combined with the Australian Government 5% Deposit Scheme, so you typically choose one path or the other rather than stacking them. The right choice depends on whether reducing your loan size matters more to you than retaining the full benefit of future capital growth.
The First Home Super Saver Scheme
The First Home Super Saver Scheme (FHSS) lets you make voluntary contributions into your superannuation and later withdraw them, along with associated earnings, toward a first home deposit. Because those contributions are generally taxed at the concessional super rate rather than your full marginal rate, many savers finish with more in hand than if they had saved the same amount in an ordinary account. Eligible buyers can have up to around $50,000 of voluntary contributions released. It requires planning, because contributions must be made and then formally released, so it suits buyers who are 12 months or more from purchasing. The details are on the Australian Taxation Office website.
State and Territory Grants and Stamp Duty Concessions
Alongside the federal schemes, each state and territory offers its own support, and this is where the figures vary most. The two main levers are the First Home Owner Grant and stamp duty concessions, and for many buyers, the stamp duty saving is the larger of the two.
The First Home Owner Grant (FHOG) is a one-off payment from your state or territory government. In most states, it now applies only to newly built homes, not established properties, and the amount differs considerably. The figures below are indicative for 2026 and should be confirmed with your state or territory revenue office, since both amounts and eligibility conditions change from time to time.
| State or territory | Grant amount | Notes |
| New South Wales | $10,000 | New homes only |
| Victoria | $10,000 | New homes only; some regional areas may differ |
| Queensland | $30,000 | New homes; contracts signed before 30 June 2026 |
| South Australia | $15,000 | New homes only |
| Western Australia | $10,000 | New homes only |
| Tasmania | $30,000 | New homes only |
| Northern Territory | Up to $50,000 | HomeGrown Territory grant for new homes |
| Australian Capital Territory | Nil | Stamp duty concessions offered instead |
Stamp duty, also called transfer duty, is often the single largest upfront cost in a purchase, which is why concessions for first home buyers can be so valuable. The thresholds differ by state. In New South Wales, for example, eligible first home buyers can receive a full transfer duty exemption on homes up to $800,000 and a concessional rate between $800,000 and $1,000,000. Because this saving reduces the cash you need at settlement rather than a cost you pay later, it can matter more to your timeline than a grant. Always confirm the current thresholds with your state revenue office, such as Revenue NSW.
Can You Combine First Home Buyer Schemes?
This is one of the most valuable questions to get right, because stacking the right schemes can dramatically reduce what you need upfront, while assuming the wrong combination is possible can derail your plans. The general rule is that most schemes are designed to work together, with a few specific exceptions.
In many cases, you can combine the Australian Government 5% Deposit Scheme, the First Home Owner Grant, a stamp duty concession, and the First Home Super Saver Scheme, particularly on a new build. These measures address different parts of the purchase, so they tend to layer rather than clash. The notable exception is Help to Buy, which cannot be used alongside the First Home Guarantee, so that is an either-or decision.
To make this concrete, consider a couple buying a $620,000 new home in an outer Brisbane suburb. They could use the First Home Guarantee to buy with a 5% deposit and no LMI, claim the Queensland First Home Owner Grant on the new build, and benefit from a stamp duty concession, while one partner had used the FHSS over the previous two years to build their share of the deposit tax-effectively. Stacked together, these meaningfully reduce the cash needed to get into the home. Not every combination is available in every state or on every property, which is exactly why it pays to confirm your specific situation before committing.
How Grants and Schemes Affect Your Home Loan Approval
Qualifying for a scheme and being approved for a loan are two separate tests, and many first-home buyers conflate them. A scheme can reduce your deposit or your costs, but it does not change whether a lender believes you can afford the repayments. Understanding how the two connect is where most of the real decision-making value sits.
Deposit, Loan-to-Value Ratio, and LMI
Your deposit drives your loan-to-value ratio (LVR), which is the size of your loan as a percentage of the property value. A 5% deposit means an LVR of 95%, which lenders treat as higher risk. Normally, that risk is covered by LMI, an insurance premium that protects the lender, not you. The Australian Government 5% Deposit Scheme removes the LMI requirement by having the government guarantee the gap, which is its central benefit. Grants and the FHSS help in a different way, by increasing your deposit and therefore lowering your LVR, which can improve both your pricing and your approval prospects.
Serviceability and the APRA Buffer
No scheme changes the core question of serviceability, which is whether you can afford the repayments. The Australian Prudential Regulation Authority (APRA) requires lenders to assess your repayments at an interest rate around 3% above the actual rate on offer. So a loan at 6% is tested at roughly 9%. This buffer is why approved amounts often feel conservative, and it applies regardless of which scheme you use. Existing debts, credit card limits (usually assessed at the full limit even if you owe nothing), and Higher Education Loan Program (HELP, formerly HECS) repayments all reduce your assessed capacity. Variable income, such as overtime, bonuses, and commissions, is typically shaded, meaning only a portion, often around 80%, is counted.
Genuine Savings and Participating Lenders
Two further details catch buyers out. First, many low-deposit loans require genuine savings, meaning the lender wants to see that at least 5% of the price was accumulated by you over time, usually around three months, rather than appearing as a sudden gift. A gifted deposit can still be used, but some lenders will not count it as genuine savings, which can delay an application. Second, not every lender participates in the government schemes, and those that do apply their own credit policies on top. Two eligible borrowers can therefore receive different answers depending on which lender assesses them, particularly where casual income, probation periods, or HELP debt are involved.
If you are unsure which schemes you can use together, or how a grant, deposit size or HELP debt may affect your approval, getting home loan guidance early can help you compare lender options before you apply. A Loanworx mortgage broker is especially useful when you are buying with a low deposit, using a government guarantee, or trying to avoid unnecessary credit enquiries.
New Build Versus Established Property: Which Gets More Support?
Because several schemes favour new homes, many buyers wonder whether building is the smarter financial move. The honest answer is that it depends on what you value, and each path carries a different mix of support and risk.
A new build tends to attract more direct government support. The First Home Owner Grant generally applies only to new homes, and some states offer larger stamp duty benefits on new construction. The trade-offs are a longer timeline, the need to manage a build, and the risk of construction delays or builder issues. An established property typically offers fewer grants, but the stamp duty concession is often the largest lever available, the timeline is shorter, and there is no construction risk. The Australian Government 5% Deposit Scheme works for both new and established homes, so it is rarely the deciding factor.
The practical way to choose is to compare the total support available on a specific new build against the total support and lower risk of a specific established home, rather than assuming the grant alone makes building worthwhile.
Real First Home Buyer Scenarios
The interaction between schemes, lender policy, and your own circumstances is clearest through examples. The scenarios below are illustrative, with rounded figures, and are designed to show the reasoning rather than promise a particular outcome.
The Single Buyer With HELP Debt
Mia earns $95,000, has a modest HELP debt, and has saved $40,000. She buys a $620,000 established unit within her city’s price cap. Using the Australian Government 5% Deposit Scheme, she puts down a 5% deposit of $31,000 and pays no LMI, with a stamp duty concession applying. Her HELP repayments reduce her assessed capacity, so her Loanworx broker compares participating lenders and selects one whose policy treats her HELP debt and income most favourably, which lifts her approval to the level she needs.
The Couple Stacking Schemes on a New Build
Sam and Alex earn $160,000 combined and build a $640,000 home in a growth corridor. They use the Australian Government 5% Deposit Scheme for the 5% deposit, claim their state’s First Home Owner Grant on the new build, and benefit from a stamp duty concession, while one of them used the FHSS to build part of the deposit. The stacked support sharply reduces their upfront cash, though they plan carefully around the longer build timeline and budget for it.
The Single Parent Using the 2% Pathway
Priya is a single parent on one income with limited savings. Saving a full deposit would take years, so she uses the Australian Government 5% Deposit Scheme to buy with a 2% deposit and no LMI. Because her serviceability is assessed on a single income, she focuses on a property well within her comfortable repayment range rather than the maximum a lender might allow.
The Buyer With a Gifted Deposit
Tom receives a $30,000 gift from his parents toward a deposit. He is surprised to learn that one lender will not count it as genuine savings, which would stall his application. His broker either selects a lender whose policy accepts gifted funds in his circumstances or advises him to hold the funds and demonstrate a savings pattern for a few months first. The scheme’s eligibility was never the obstacle; the lender’s genuine savings policy was.
Costs to Budget for Beyond the Deposit
Even with generous schemes, a purchase involves more cash than the deposit alone, and underestimating this is a common reason buyers come up short. It is worth mapping the full picture early. The figures below are indicative ranges and vary by state, property, and lender.
- Stamp duty is often reduced or nil for eligible first home buyers under the threshold
- Conveyancing or solicitor fees, around $1,500 to $2,500
- Building and pest inspection, around $400 to $800
- Loan application or establishment fees, from $0 to $800
- Lenders Mortgage Insurance, nil if using the First Home Guarantee, otherwise variable
- Home and contents insurance for the first year, around $1,000 to $1,800
- Connection and moving costs, around $500 to $1,500
- A sensible cash buffer of $3,000 or more
The schemes reduce some of these costs substantially, particularly LMI and stamp duty, but they rarely remove all of them, so plan for the deposit plus several thousand dollars more.
Common Mistakes First Home Buyers Make
Most costly errors around grants and schemes come from a handful of predictable misunderstandings. Knowing them in advance is the cheapest protection available.
- Assuming a scheme equals approval. Eligibility for a grant or guarantee does not mean a lender will approve your loan; serviceability still applies.
- Buying just over the price cap. Paying slightly above your scheme’s property cap can cost you the entire benefit, so confirm the cap for the exact property.
- Treating a gift as genuine savings. Some lenders will not, which can delay or complicate an application.
- Choosing a new build only for the grant. The grant is one factor; weigh it against build timelines, risk, and the stamp duty saving on an established home.
- Ignoring scheme timing. Some grants apply only to contracts signed within a window, so check deadlines before committing.
- Not checking participating lenders. Not every lender offers the schemes, and policies differ, so the right lender choice matters.
- Borrowing the maximum offered. Being eligible and approved is not a reason to stretch to your limit; leave room for rate rises.
Broker or Bank? Why Lender Policy Matters
With grants and schemes in the picture, where you arrange your loan becomes more consequential, not less. A single bank can only offer its own products and its own credit policy, and it may not participate in every scheme. A Loanworx broker works across a panel of lenders and can match your situation to the one whose policy fits you best, which matters a great deal given how differently lenders treat income, debts, genuine savings, and scheme eligibility.
On cost, brokers are generally paid a commission by the lender on settlement rather than a fee by you, so the service is usually free to the borrower. It is reasonable to ask how a broker is paid, and a good broker will explain this openly. Brokers also operate under a best interests duty, a legal obligation to act in your interests, and can assess your likely approval across multiple lenders without lodging formal credit enquiries until you are ready. For a first home buyer combining several schemes for the first time, that breadth is where much of the value lies.
Frequently Asked Questions (FAQs)
1. What grants and schemes are available for first-home buyers in 2026?
The main options are the Australian Government 5% Deposit Scheme (a 5% deposit or 2% for single parents, with no LMI), Help to Buy (a shared equity scheme), the First Home Super Saver Scheme (saving a deposit inside super), the First Home Owner Grant from your state or territory, and stamp duty concessions. Each does something different, and several can be used together.
2. Can I buy with a 5% deposit and avoid LMI?
Yes, if you qualify for the Australian Government 5% Deposit Scheme. The government guarantees a part of your deposit below the usual 20%, which removes the lender’s need for Lenders Mortgage Insurance. Property price caps apply and vary by location, and you apply through a participating lender rather than directly to Housing Australia.
3. Can I combine the First Home Owner Grant with a stamp duty concession?
In many cases, yes. The grant and stamp duty concession address different costs, so they often layer together, particularly on a new build. The Australian Government 5% Deposit Scheme and the First Home Super Saver Scheme can usually be added as well. Availability depends on your state and the property, so confirm the specific combination before you commit.
4. Can I use Help to Buy and the Australian Government 5% Deposit Scheme together?
Generally no. Help to Buy and the Australian Government 5% Deposit Scheme are usually treated as alternatives rather than schemes you stack, so this is an either-or decision. Help to Buy reduces your loan size through shared equity but means sharing future capital growth, while the Australian Government 5% Deposit Scheme keeps full ownership and lets you buy with a 5% deposit and no LMI. Confirm your eligibility for each before deciding.
5. Do I need genuine savings to use these schemes?
Often, yes. Many low-deposit loans require genuine savings, meaning the lender wants to see that at least 5% of the price was accumulated by you over time rather than appearing suddenly. A gifted deposit can sometimes be used, but not every lender counts it as genuine savings, which is a key policy difference between lenders and one worth checking before you apply.
6. Does HELP debt affect my borrowing power?
Yes. A Higher Education Loan Program (HELP) debt is treated as an ongoing financial commitment and reduces your assessed borrowing capacity, because the repayments are deducted from the income a lender counts. Lenders differ in how they treat a HELP debt that is close to being paid off, which is another reason the choice of lender can change your result.
7. What happens if I buy above the property price cap?
If the purchase price exceeds your scheme’s cap for that location, you generally lose access to that scheme for the purchase, even if you are only slightly over. Because the caps are set by location and updated periodically, it is important to confirm the exact cap for the property you are considering before making an offer.
The Bottom Line
The first home buyer schemes available in 2026 are genuinely powerful, particularly the expanded Australian Government 5% Deposit Scheme, which has opened a 5% deposit path with no LMI to far more buyers. The buyers who benefit most are not simply those who qualify, but those who understand how the schemes fit together, which combinations are allowed, and how each one interacts with the way a lender assesses them.
Treat the schemes as tools to be matched to your situation rather than boxes to tick. Confirm your eligibility and the price caps, work out which combination gives you the best result, and choose a lender whose policy suits your income, savings, and circumstances. Done well, the right mix of grants and schemes can bring your first home forward by years and leave you in a stronger financial position from day one.
